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Penalties imposed on thousands of unpaid carers who fall foul of the discredited carer’s allowance benefit rules should be suspended until the government has fixed the system, the Liberal Democrat leader, Ed Davey, has said.
A Guardian investigation last year revealed hundreds of thousands of unpaid carers were landed with huge debts – and in some cases prosecuted for fraud – after being inadvertently trapped by chronic failures in the benefit’s design and administration.
Although the government promised a year ago to reform carer’s allowance, there is increasing impatience among campaigners over the lack of progress and concern hundreds of unpaid carers are being hit with fresh repayment demands each week.
“It cannot be right that the government is still hounding carers for repayments, long after this scandal was exposed and even after we secured an independent review, but before anything has been done to put things right,” Davey said.
An independent inquiry into carer’s allowance headed by the disability policy expert Liz Sayce was ordered by the government in December. Sayce presented its findings to ministers three months ago but it is unclear when the government will publish her report or its formal response.
“The government needs to pause repayments now, publish the review’s findings without further delay, and get on with fixing the system so it actually works for carers,” Davey said.
A Liberal Democrat amendment to the government’s fraud and error bill to be debated in the Lords next week calls on the Department for Work and Pensions (DWP) to stop pursuing carers’ repayments until the government’s plans to reform the benefit are implemented.
Lord Palmer, the Liberal Democrat work and pensions spokesperson in the Lords who laid the amendment, said it was wrong unpaid carers were continuing to be unfairly punished by a system that was clearly not working. He called the carer’s allowance scandal “a national disgrace”.
At least 144,000 carers are now repaying more than £251m in carer’s allowance overpayments, typically between £2,000 and £5,000 but sometimes as high as £20,000. These draconian punishments are applied when carers working part-time breach earnings limits attached to the £82.30 a week benefit.
This “cliff edge” penalty means carers pay back the entire benefit if they breach earnings limits by even tiny amounts. A carer who received 50p more than the £196 weekly threshold for 52 weeks would pay back not £26 but £4,258.80.
The impact has been exacerbated by the DWP’s routine failure over many years to investigate all the electronic notifications it receives alerting them to potential earnings breaches. This has resulted in carer’s allowance claimants unknowingly accumulating overpayments over several years.
Campaigners have consistently called for carer’s allowance overpayments to be written off given the chronic failures of the previous government to fix problems they had been warned about many years ago internally through a DWP whistleblower and externally after issues were raised by MPs.
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Emily Holzhausen, director of of policy and public affairs at Carers UK, said: “It’s critical that we see the publication of the independent review very quickly with a clear timeline for action to ensure that this scandal is addressed head on. With every day that goes by, unpaid carers are still being subjected to overpayments demands operating under what, everyone has acknowledged, is a broken system.”
She added: “Given the devastating impact this can have on unpaid carers who unwittingly go over the earnings limit, it’s essential that we get this change as soon as possible to prevent more carers ending up in such a terrible situation.”
A DWP spokesperson said: “We’re on the side of carers. That’s why we’ve commissioned an independent review of carer’s allowance overpayments and delivered the biggest ever cash increase in the benefit’s earnings threshold – helping 60,000 carers by 2029-30.
“We will respond to the independent review in due course and in the meantime, we must balance our duty to the taxpayer while ensuring carer’s allowance is administered fairly, accurately, and best supports those who use it.”
